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McDonald's Reveals Its Master Plan

McDonald's has some big plans to improve its efficiency in 2014.

McDonald's(NYSE:MCD) is the biggest restaurant chain on the planet, but most would agree that it's not the best. Thankfully the folks behind the Golden Arches are bent on getting better in the coming months in ways that may improve food choices and convenience.

Instead of spending big bucks on sprucing up some of the more dated eateries -- and getting franchisees to do the same -- the big push for 2014 are new high-density prep tables that will have room for dozens of fresh ingredients. These tables will be added to all of the more than 14,000 stateside locations, giving the chain the flexibility to add more choices.

Expanding flavors should improve both the quality of the food and the chances that regulars will tire of the same choices. However, that could also be dangerous. Customer satisfaction has been suffering as McDonald's increases the options. The Wall Street Journal reported earlier this year that executives were alerting franchisees about an alarming increase in customer complaints about rude or unprofessional employees. I argued that the chain's expanding menu could be the culprit, and if slowing down the process with caramel mochas and mango smoothies is bad enough, imagine having to wait behind someone deciding between two dozen different potential sandwich toppings.

The push for customization may go beyond more choices. Mickey D's is testing iPad menus at a restaurant in California, letting eat-in customers doll up a Quarter Pounder by adding one of roughly 20 different toppings. Earlier this year it was also testing a smartphone pre-ordering app in some stores, but that technology's already in place at faster-growing rivals, including Five Guys.

One would hope that McDonald's wouldn't be broadening its choices if it didn't think it could handle it. The more ingredients you have to tweak, the longer the orders take to get placed and the greater the likelihood that employees will get it wrong. However, clearly this matters at the burger joint that saw an impressive 10-year streak of positive monthly comps end late last year.

In the meantime, McDonald's will tackle slowing drive-through times by adding a third window at new and rebuilt restaurants next year. This isn't a third ordering window. The logistics of the dual-order windows at some locations now are already tricky to tackle. No, this will be a third window beyond where drivers stop to pay and then pick up their orders. The third window would give McDonald's a place to send drivers with complicated orders or items that have unusually long prep times. It's a move that will make things less convenient for everyone, since it won't slow down other drivers and won't force employees to leave the restaurant to walk out to cars that they tell to pull off to the side. There shouldn't be any controversy behind that move, as it will legitimately improve the experience for all parties.

However, the push to introduce high-tech and broader options at McDonald's will be challenging. The payoff could be huge if it pans out, but there are still many ways for the Hamburglar to spoil the day here.

Author

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time with more than 20,000 bylines over those 22 years. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he splits his time living in Miami, Florida and Celebration, Florida.
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